While the numbers evened out some last week, the insiders selling stock still dwarfed the buyers, and it could ramp back up as insider transaction windows start to open again following fourth-quarter earnings reports. While not always a negative, often when insider selling dominates the buyers it signals a market top, and after a nearly eight-year rally, and no significant sell-offs since the beginning of last year, we may be poised for a correction.
We cover insider selling every week at 24/7 Wall St., and we like to remind readers that just because an individual or 10% institutional owner sells stock, that is no cause for immediate alarm. Many top executives, and even directors, are compensated with stock and often sell just to diversify portfolios or purchase other assets.
Here are companies that reported notable insider selling last week.
Broadcom Ltd. (NASDAQ: AVGO) has been absolutely on fire over the past year, and it looks as though a director at the semiconductor device maker has decided to cash out a huge chunk. Private equity giant Silver Lake sold a massive million shares of the stock at prices that ranged from $200.44 to $202.22. The total for the sale was posted at a jaw-dropping $200 million. The shares closed last Friday at $206.16, so some money was left on the table, it appears. The 52-week trading range is $114.25 to $206.60, and the Wall Street consensus price target is $215.40.
Another semiconductor company that has had a huge year is Texas Instruments Inc. (NYSE: TXN), and a bevy of executives from the C suites were selling shares last week. The chief executive officer, chief financial officer, chief operating officer and numerous senior vice presidents sold a combined 339,544 shares at prices that range from $75.40 to $77.51 a share. The total for the combined sales was a whopping $28 million. Shares closed last Friday at $76.50, in a 52-week trading range of $49.10 to $79.47. The consensus price objective is $81.46.
The chairman of the board at D.R. Horton Inc. (NYSE: DHI) — the man with his name on the door — also sold stock last week. Donald Horton parted with a block of 2 million shares of the home builder at prices between $30.98 and $31.46 per share. The total for the trade came to a whopping $63 million. The stock ended the week at $29.89, so the timing looks very solid. The 52-week range is $22.97 to $34.656, and the consensus price objective is $34.30.
Carnival PLC (NYSE: CUK) had a unit CEO at the popular cruise line selling some stock last week. That executive parted with a total of 41,097 shares at $53.04 apiece. The total for the sale was set at $2 million. The stock closed Friday at $54.18, in a 52-week trading range of $42.45 to $56.33. The consensus price objective is surprisingly $44.
A vice chairman at U.S. Bancorp Inc. (NYSE: USB) was selling stock last week. P.W. Parker sold 30,000 shares of the regional banking giant at prices that ranged from $53.25 to $53.44. The total for the sale was reported at $2 million. The stock closed Friday at $53.66. The 52-week range is $37.07 to $54.00. The consensus price target is also $54, so almost a top tick trade for Parker.
These companies also reported insider selling this past week: Chemical Financial Corp. (NASDAQ: CHFC), FCB Financial Holdings Inc. (NYSE: FCB), Linear Technology Corp. (NASDAQ: LLTC), PulteGroup Inc. (NYSE: PHM) and Western Alliance Bancorp. (NYSE: WAL).
With the market rocketing again last Friday on the sold jobs number, it won’t be a surprise to see more sellers in the coming weeks. The question still remains: Is the market nearing the top, as stocks have become very expensive and extended, or will we push even higher?
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